Sat, May 04, 2019 - Page 10 News List

Buffett embraces Amazon as Berkshire gains stake

‘YOUNGER EYES’:Buffett has avoided technology-related stocks, saying he does not understand the sector well enough, and credited the purchase to his firm’s deputies

Bloomberg

Billionaire investor Warren Buffett has said that he underestimated Amazon.com Inc chief executive officer Jeff Bezos, and now one of his deputies is willing to put money behind the technology giant.

Berkshire Hathaway Inc has been buying Amazon shares and the purchases would show up in a regulatory filing later this month, Buffett told CNBC on Thursday.

The Berkshire Hathaway chairman and chief executive officer said “one of the fellows in the office that manage money” made the purchases, a reference to investment managers Todd Combs and Ted Weschler.

Combs and Weschler have over the past few years gained influence at Berkshire Hathaway.

Buffett credited some of his conglomerate’s purchases of airline stocks and Apple Inc to the deputies and noted their involvement in helping the firm beyond their stock-picking duties.

Buffett, 88, and long-time business partner, Charles Munger, 95, have praised the pair, with Munger saying they give Berkshire “younger eyes.”

The Amazon stake further cements the relationship between Berkshire Hathaway and Amazon.

Berkshire Hathaway is a partner with Amazon and Wall Street bank JPMorgan Chase & Co in a health venture. The firms are setting up an independent company to offer healthcare services to their US employees more transparently and at a lower cost.

Amazon’s stock, up 27 percent this year at Thursday’s close, climbed after normal market hours.

Buffett’s assistants did not immediately respond to a message seeking comment.

Buffett said in the interview that he has been “a fan” of the online retail giant and “an idiot for not buying” shares in the past.

He was speaking ahead of Berkshire Hathaway’s annual shareholders’ meeting today in Omaha, Nebraska.

Buffett has mostly avoided technology-related stocks, saying he did not understand the products and markets well enough.

One exception was IBM Corp. His US$10 billion investment in the computer giant in 2011 was a curiosity for Berkshire Hathaway and it did not end well. After taking losses, Buffett had sold nearly all the IBM stock by last year.

Then in 2016, Berkshire Hathaway jumped into Apple and has built its stake in the iPhone maker into a holding valued at more than US$50 billion.

Buffett bought Apple and Amazon when they were not at their cheapest. Amazon shares on Thursday closed at US$1,900.82, while Apple shares closed at US$209.15.

Still, Berkshire Hathaway ended last year with its Apple investment valued more than the cost of buying the shares.

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